3 ways to support your children financially at every stage of life

Supporting your children may be a priority when creating a financial plan, and you’re not alone in this.

As living costs increase, younger generations find it more difficult to reach important milestones such as attending university, buying a home, or getting married. As a result, many parents are setting aside wealth for their children.

According to MoneyWeek, 74.6% of parents are saving for their children, with an average pot of £18,212.

Many are helping their children well into adulthood too. In 2024, IFA Magazine reported that 33% of UK adults received help from parents with their day-to-day spending.

One of the benefits of a strong financial plan is that you can aid your children in this way, helping them build financial stability and achieve their own goals in life.

Read on to learn about three ways to support your children financially at every stage of life.

1. Contribute to a Junior ISA for young children

If you start when they’re young, you can build a healthy savings pot for your child by the time they reach adulthood. They could use these funds to help with university costs, buy a car, or put a deposit down on their first home, for example.

A Junior ISA (JISA) is an effective savings vehicle for your child because it offers the same tax advantages as an adult ISA. That means there is no Income Tax on interest they generate on their savings, and no Dividend Tax or Capital Gains Tax (CGT) to pay on investment returns.

In 2025/26, you can pay up to £9,000 each year into a JISA on behalf of a child or grandchild. This is separate from your own adult ISA allowance of £20,000. You could pay into a Junior Cash ISA, invest through a Junior Stocks and Shares ISA, or opt for a combination of both.

It’s up to you to manage their savings until they turn 16, when they can take control themselves. When they’re 18, the JISA automatically transfers into an adult ISA, and they can access the savings.

Contributing to a JISA from an early age is a useful way to build wealth for your child tax-efficiently, and if you invest, you could generate significant growth by the time they’re 18 and can access the funds.

It’s also a good way to teach them about the basics of saving and investing as you can show them how their pot grows over time. You could also involve them in decisions about investments.

2. Pay into a pension for your children at any stage of life

As the cost of living rises, the amount that savers need to maintain a comfortable retirement is increasing. Additionally, higher outgoings could make it more challenging to save for retirement.

As a result, younger generations may be concerned about how they will fund their lifestyles in retirement.

Indeed, PensionsAge reports that 66% of millennials are worried they’re not saving enough for retirement. That number falls slightly to 60% among Generation Z, but this may be because they’re less likely to face costs associated with childcare or homeownership.

That’s why you may consider helping your child by paying into a pension on their behalf.

You can do this at any stage of life, so you might set up a child’s pension when they’re young and start contributing.

They’ll benefit from tax relief on contributions up to their “Annual Allowance” – in 2025/26, this is £3,600 if they’re not working.

Alternatively, you could make contributions to an adult child’s existing pension. They will also benefit from tax relief up to their Annual Allowance, which will be £60,000 (or 100% of their earnings, whichever is lower) in 2025/26 if they’re employed.

Your child will generate tax-efficient growth on their pension savings, helping them increase the size of their pot, meaning they may be more likely to afford a comfortable retirement.

Bear in mind that they won’t usually be able to access their pension savings until they reach the normal minimum pension age (NMPA). This is currently 55 but is increasing to 57 from 2028.

So, if you want to help your child find their feet earlier in life, contributing to a pension might not be as useful. However, contributing to their pension could help them overcome significant retirement planning challenges later.

3. Consider gifting a lump sum to help with important life milestones

As well as helping your child build their own savings, you could gift them a lump sum to put towards important life milestones such as purchasing their first home or getting married.

This is becoming increasingly common, as the BBC reports that 52% of first-time buyers received help from their parents or other family members last year.

One potential benefit of gifting a lump sum is that your child only receives the wealth when they need it for a specific reason. In comparison, if you paid into a JISA and they gained access to the savings when they were 18, you don’t have as much control over how and when they spend the funds.

It’s important to consider the tax implications of gifting wealth to your children

Gifting wealth to your children at any age could help them achieve their own goals in life. What’s more, passing wealth to the next generation now could help you reduce the size of your estate for Inheritance Tax (IHT) purposes.

This is a major concern for many people following announcements about changes to IHT and pensions, and rumours about further tax rises in the upcoming Budget.

However, the rules around IHT and gifting can be difficult to understand. That’s why you may benefit from our professional guidance so you can effectively support your children without accidentally triggering an IHT charge.

Get in touch

We can help you explore the most tax-efficient ways to pass wealth to your children at every stage of life.

Please contact us at hello@ardentuk.com or call or WhatsApp us on 01904 655 330. As an award-winning financial advice company with advisers included in the 2025 VouchedFor Top Rated guide, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.